Movie Distortion Node in compositor does not respect optical shift values from Movie-Clip-Editor?
thanks for the reply :) 

I actually did manage to get the distortion working properly. :) 
My mistake was that I had hit the "centre" button( Movie Clip Editor > Properties panel > camera > centre ) after solving and that was throwing the undistort node off in the compositor.

Setting the correct values again in the "centre" panel fixed it. 

I cannot post the images here as "uploading" is blocked in  my office due to security reasons.

The high error values I will solve later in another proprietery software @my office.  Its awesome.

Thanks, 
Jayraj